6EC01 - 11 May am - 90 minutes
6EC02 - 19 May pm - 90 minutes
6EC03 - 11 June pm - 90 minutes
6EC04 - 19 June am - 2 hours
Monday, 15 December 2014
My free Christmas present for you:the Financial Times
A few years back the Government's chief economics civil servants indicated that the best newspaper for A2 and AS Level Economics students was the FT. Please do use the Christmas break to get the FT for free - where you can weekly access excellent articles by the FT's Chief Economist: Martin Wolf.
See this following link for Martin Wolf's verdict on the recent Autumn Budget statement:
See this following link for Martin Wolf's verdict on the recent Autumn Budget statement:
The battle over the public finances will define Britain
UK's trend growth (productivity) may now be 1% per annum on average
Fiscal receipts (mostly tax revenue) is likely to rise from 35.5% of GDP to 36.2% by 2020.
"Public sector net debt is now too high"
"The case for achieving an overall fiscal surplus in the next parliament is not overwhelming."
Christmas at Econstories
Aside from putting these excellent economics Christmas gifts on your Santa wish list - there is some entertaining material here in understanding the battle of ideas. A battle between those who favour the use of government intervention to put an end to the great recession (the followers of Keynes - Keynesian interventionists) against those who blame the great recession on government intervention and want to see less state intervention (followers of Hayek - free market economists).
http://econstories.tv/fight-of-the-century/ AS introduction (A2 recap)
http://econstories.tv/fear-the-boom-and-bust/
http://econstories.tv/fight-of-the-century/ AS introduction (A2 recap)
http://econstories.tv/fear-the-boom-and-bust/
Thursday, 4 December 2014
UK's trade deficit
Exports and Imports
The demand for exports and imports is influenced by:
Price - changes in costs of production such as cheap wages or price of oil
Price - changes in exchange rates - SPICED - strong pound imports cheaper exports dearer
Income - growth or recession in UK have an impact on what we spend on imports and likewise growth or recession in foreign markets will change demand for UK exports (especially luxury products that have a high income elasticity of demand)
Quality - improvements in UK design, engineering and high technology have made our gods and services more attractive worldwide.
The size of the UK's trade deficit is very volatile.
In 2015 it hit a record 6% of GDP compared to the usual large and persistent 2-3%.
Reasons why:
1. the pound may rise against the euro making the price of our exports less competitive so hitting UK export earnings and making imports more attractive - assuming demand for both is price elastic
2. World recession may also mean less is spent on UK luxury exports e.g Jaguar exports to the BRICS
3. UK economy may continue to grow resulting in the purchase of more imported clothing and electronic products so overall expenditure on imports rises.
However
Less being spent on imports
1. falling oil prices mean we are spending less on oil related imports which are price inelastic
2. deflation in the Eurozone so may be faced with spending less on imported euro goods, assuming demand is price inelastic
3. The UK economy may slow down resulting in lower spending by UK households and firms on imports
EXAM TIPS:
Please note as an exam an important assumption to be made is the Price Elasticity of Demand for exports and imports.
Look at the direction of change when considering the impact on the UK economy e.g using AS/AD assess explain the likely impact on the UK of a widening trade deficit?
see link here for answer: https://www.youtube.com/watch?v=HMGMk-5RZcc&index=7&list=PLB19E61D93CD7E354
Some relevant articles:
http://www.economicshelp.org/blog/1310/economics/uk-trade-deficit/
http://www.bbc.co.uk/news/business-30411134
http://www.tradingeconomics.com/united-kingdom/balance-of-trade
The demand for exports and imports is influenced by:
Price - changes in costs of production such as cheap wages or price of oil
Price - changes in exchange rates - SPICED - strong pound imports cheaper exports dearer
Income - growth or recession in UK have an impact on what we spend on imports and likewise growth or recession in foreign markets will change demand for UK exports (especially luxury products that have a high income elasticity of demand)
Quality - improvements in UK design, engineering and high technology have made our gods and services more attractive worldwide.
The size of the UK's trade deficit is very volatile.
In 2015 it hit a record 6% of GDP compared to the usual large and persistent 2-3%.
Reasons why:
1. the pound may rise against the euro making the price of our exports less competitive so hitting UK export earnings and making imports more attractive - assuming demand for both is price elastic
2. World recession may also mean less is spent on UK luxury exports e.g Jaguar exports to the BRICS
3. UK economy may continue to grow resulting in the purchase of more imported clothing and electronic products so overall expenditure on imports rises.
However
Less being spent on imports
1. falling oil prices mean we are spending less on oil related imports which are price inelastic
2. deflation in the Eurozone so may be faced with spending less on imported euro goods, assuming demand is price inelastic
3. The UK economy may slow down resulting in lower spending by UK households and firms on imports
EXAM TIPS:
Please note as an exam an important assumption to be made is the Price Elasticity of Demand for exports and imports.
Look at the direction of change when considering the impact on the UK economy e.g using AS/AD assess explain the likely impact on the UK of a widening trade deficit?
see link here for answer: https://www.youtube.com/watch?v=HMGMk-5RZcc&index=7&list=PLB19E61D93CD7E354
Some relevant articles:
http://www.economicshelp.org/blog/1310/economics/uk-trade-deficit/
http://www.bbc.co.uk/news/business-30411134
http://www.tradingeconomics.com/united-kingdom/balance-of-trade
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